UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter ended Commission file number
July 4, 1998 1-3246
BELL & HOWELL COMPANY
(Exact Name of Registrant as Specified in its Charter)
Delaware 36-3580106
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
5215 Old Orchard Road, Skokie, Illinois 60077-1076
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (847) 470-7100
Indicate by check mark whether the Registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
The number of shares of the Registrant's Common Stock, $.001
par value, outstanding as of August 11, 1998 was 23,484,508.
<PAGE>
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION PAGE
- ------ --------------------- ----
Item 1. Financial Statements
Consolidated Statements of Operations for
the Thirteen and Twenty-Six Weeks Ended
July 4, 1998 and June 28, 1997 ................. 1
Consolidated Balance Sheets - Assets at
July 4, 1998 and January 3, 1998 ............... 2
Consolidated Balance Sheets - Liabilities
and Shareholders' Equity at July 4, 1998
and January 3, 1998 ............................ 3
Consolidated Statements of Cash Flows for
the Twenty-Six Weeks Ended
July 4, 1998 and June 28, 1997 ................. 4
Notes to the Consolidated Financial
Statements ..................................... 5
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations ...................................... 8
PART II. OTHER INFORMATION
- ------- -----------------
Item 1. Legal Proceedings ................................ 14
Item 5. Other Information ................................ 14
Item 6. Exhibits and Reports on Form 8-K ................. 14
SIGNATURE PAGE .............................................. 15
<PAGE>
<TABLE>
Bell & Howell Company and Subsidiaries
Consolidated Statements of Operations
(Dollars and shares in thousands, except per share data)
(Unaudited)
<CAPTION>
Thirteen Weeks Twenty-Six Weeks
Ended Ended
-------------------- --------------------
July 4, June 28, July 4, June 28,
1998 1997 1998 1997
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net sales $ 220,123 $ 214,968 $ 421,497 $ 406,095
Operating costs and expenses:
Cost of sales 133,760 132,826 257,567 253,782
Research and development 9,438 9,796 18,598 18,958
Selling and administrative 55,861 53,509 111,602 100,041
-------- -------- -------- --------
Total operating costs and expenses 199,059 196,131 387,767 372,781
Operating income 21,064 18,837 33,730 33,314
Net interest expense:
Interest (income) (6,051) (5,345) (12,345) (10,357)
Interest expense 12,086 16,849 24,425 32,951
-------- -------- -------- --------
Net interest expense 6,035 11,504 12,080 22,594
Earnings from continuing operations
before income taxes and extraordinary items 15,029 7,333 21,650 10,720
Income tax expense 6,012 3,052 8,660 4,459
-------- -------- -------- --------
Earnings from continuing operations
before extraordinary items 9,017 4,281 12,990 6,261
Earnings (loss) from discontinued operations (719) 329 (1,445) 399
Extraordinary losses -- (67) -- (972)
-------- -------- -------- --------
Net earnings $ 8,298 $ 4,543 $ 11,545 $ 5,688
======== ======== ======== ========
Net earnings per common share:
Basic:
Earnings from continuing operations
before extraordinary items $ 0.38 $ 0.23 $ 0.55 $ 0.34
Earnings (loss) from discontinued operations (0.03) 0.02 (0.06) 0.02
Extraordinary losses -- -- -- (0.05)
-------- -------- -------- --------
Net earnings per common share $ 0.35 $ 0.25 $ 0.49 $ 0.31
======== ======== ======== ========
Diluted:
Earnings from continuing operations
before extraordinary items $ 0.38 $ 0.23 $ 0.55 $ 0.34
Earnings (loss) from discontinued operations (0.03) 0.02 (0.06) 0.02
Extraordinary losses -- -- -- (0.05)
-------- -------- -------- --------
Net earnings per common share $ 0.35 $ 0.25 $ 0.49 $ 0.31
======== ======== ======== ========
Average number of common shares and equivalents outstanding:
Basic 23,444 18,335 23,433 18,325
Diluted 23,599 18,473 23,595 18,430
The accompanying Notes to the Consolidated Financial statements
are an integral part of these statements
-1-
</TABLE>
<PAGE>
<TABLE>
Bell & Howell Company and Subsidiaries
Consolidated Balance Sheets
(Dollars in thousands)
Assets
<CAPTION>
July 4, January 3,
1998 1998
----------- -----------
(Unaudited) (Audited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 6,701 $ 13,339
Accounts receivable, less allowance for doubtful
accounts of $6,782 and $7,068, respectively 185,168 198,228
Inventory 112,160 101,756
Other current assets 14,521 11,825
-------- --------
Total current assets 318,550 325,148
Property, plant and equipment, at cost 407,057 391,309
Accumulated depreciation (261,714) (241,655)
-------- --------
Net property, plant and equipment 145,343 149,654
Long-term receivables 48,819 66,625
Goodwill, net of accumulated amortization 209,748 202,730
Net assets of discontinued operations 16,925 20,470
Other assets 38,065 35,227
-------- --------
Total assets $ 777,450 $ 799,854
======== ========
The accompanying Notes to the Consolidated Financial Statements
are an integral part of these statements.
</TABLE>
-2-
<PAGE>
<TABLE>
Bell & Howell Company and Subsidiaries
Consolidated Balance Sheets
(Dollars and shares in thousands)
Liabilities and Shareholders' Equity
<CAPTION>
July 4, January 3,
1998 1998
------------ -------------
(Unaudited) (Audited)
<S> <C> <C>
Current liabilities:
Notes payable $ 3,517 $ 3,567
Current maturities of long-term debt 885 919
Accounts payable 67,895 75,089
Accrued expenses 69,275 66,446
Deferred income 150,895 175,504
-------- --------
Total current liabilities 292,467 321,525
Long-term liabilities:
Long-term debt 480,183 497,252
Other liabilities 57,041 45,625
-------- --------
Total long-term liabilities 537,224 542,877
Shareholders' equity:
Common Stock, $.001 par value, 23,482 shares issued
and outstanding at July 4, 1998, and 23,425 shares issued
and 23,415 shares outstanding at January 3, 1998 23 23
Capital surplus 140,054 138,660
Notes receivable from executives (2,461) (1,707)
Retained earnings (deficit) (186,766) (198,311)
Cumulative foreign exchange translation adjustments (3,091) (2,922)
Treasury stock -- (291)
-------- --------
Total shareholders' equity (deficit) (52,241) (64,548)
Commitments and contingencies -- --
-------- --------
Total liabilities and shareholders' equity $ 777,450 $ 799,854
======== ========
The accompanying Notes to the Consolidated Financial Statements
are an integral part of these statements.
</TABLE>
-3-
<PAGE>
<TABLE>
Bell & Howell Company and Subsidiaries
Consolidated Statements of Cash Flows
(Dollars in thousands)
(Unaudited)
<CAPTION>
Twenty-Six Weeks Ended
---------------------------
July 4, June 28,
1998 1997
-------- --------
<S> <C> <C>
Operating activities:
Earnings from continuing operations
before extraordinary items $ 12,990 $ 6,261
Extraordinary losses -- (972)
Depreciation and amortization 27,139 28,255
Debt accretion -- 11,434
Changes in operating assets and liabilities:
Accounts receivable 14,116 26,887
Inventory (9,722) (2,474)
Other current assets (2,638) (1,436)
Long-term receivables 17,806 2,624
Income taxes 8,440 847
Accounts payable (7,446) (17,301)
Accrued expenses (1,221) (16,839)
Deferred income and other long-term liabilities (19,762) (30,210)
Other, net (11,380) (5,381)
------- -------
Net cash provided by continuing operations 28,322 1,695
Net cash provided (used) by discontinued operations 2,100 (23,181)
------- -------
Net cash provided (used) by operating activities 30,422 (21,486)
Investing activities:
Expenditures for property, plant and equipment (15,794) (17,160)
Acquisitions (5,046) (5,753)
------- -------
Net cash used by investing activities (20,840) (22,913)
Financing activities:
Proceeds from short-term debt 7,407 3,831
Repayment of short-term debt (7,382) (6,407)
Proceeds from long-term debt 44,006 70,903
Repayment of long-term debt (61,109) (25,679)
Proceeds from Common Stock, net 990 806
------- -------
Net cash provided (used) by financing activities (16,088) 43,454
Effect of exchange rate changes on cash (132) (372)
------- -------
Increase (decrease) in cash and cash equivalents (6,638) (1,317)
Cash and cash equivalents, beginning of period 13,339 15,500
------- -------
Cash and cash equivalents, end of period $ 6,701 $ 14,183
======= =======
The accompanying Notes to the Consolidated Financial Statements
are an integral part of these statements.
</TABLE>
-4-
<PAGE>
Bell & Howell Company and Subsidiaries
Notes to the Consolidated Financial Statements
(Dollars and shares in thousands)
Note 1 - Basis of Presentation
The consolidated financial statements include the accounts
of Bell & Howell Company and its subsidiaries (collectively the
"Company") and have been prepared without independent audit,
except for the balance sheet data as of January 3, 1998.
In the opinion of the Company's management, the consolidated
financial statements include all adjustments necessary to present
fairly the information required to be set forth therein, and such
adjustments are of a normal and recurring nature. Certain
information and footnote disclosures normally included in
financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted.
The Company's management believes, however, that the disclosures
are adequate to make the information presented not misleading.
These financial statements should be read in conjunction with the
Consolidated Financial Statements and the notes thereto included
in Bell & Howell Company's annual report for the fiscal year
ended January 3, 1998.
Note 2 - Significant Accounting Policies
Inventory. The Company uses the last-in, first-out (LIFO)
method of valuing the majority of its domestic inventory. Use of
the LIFO method is predicated on a determination of inventory
quantities and costs at the end of each fiscal year, and
therefore interim determinations of LIFO inventory values and
results of operations are by necessity based on management's
estimates of expected year-end inventory quantities and costs.
The excess of replacement cost over the LIFO values of inventory
was $4,064 at July 4, 1998, and January 3, 1998. The components
of inventory are shown in the table below as of the dates
indicated:
<TABLE>
<CAPTION>
July 4, January 3,
1998 1998
--------- ---------
<S> <C> <C>
Finished products 63,500 61,342
Products in process and materials 48,660 40,414
------- -------
Total inventory $112,160 $101,756
======= =======
</TABLE>
-5-
<PAGE>
Net Earnings per Common Share. Basic net earnings per
common share is computed by dividing net earnings by the weighted
average number of common shares outstanding during the period.
Diluted net earnings per common share is computed by dividing net
earnings by the weighted average number of common shares
outstanding during the period, and assumes the issuance of
additional common shares for all dilutive stock options
outstanding during the period. A reconciliation of the weighted
average number of common shares and equivalents outstanding in
the calculation of basic and diluted earnings per share is shown
in the table below for the periods indicated:
<TABLE>
<CAPTION>
Thirteen Weeks Ended Twenty-Six Weeks Ended
---------------------- ----------------------
July 4, June 28, July 4, June 28,
1998 1997 1998 1997
------ ------ ------ ------
<S> <C> <C> <C> <C>
Basic 23,444 18,335 23,433 18,325
Dilutive effect of stock options 155 138 162 105
------ ------ ------ ------
Diluted 23,599 18,473 23,595 18,430
====== ====== ====== ======
</TABLE>
Note 3 - Discontinued Operations
In December 1997, the Company adopted a plan to divest its
postal contracting business, and accordingly the operating
results and net assets of this business have been segregated from
continuing operations. The Consolidated Statements of Operations
separately reflect the earnings (after tax) of the postal
contracting business, which includes an allocation of the
Company's interest expense based on projected divesture proceeds.
The Consolidated Balance Sheets separately reflect the net assets
of the postal contracting business as a non-current asset.
Results from discontinued operations are shown in the table
below for the periods indicated:
<TABLE>
<CAPTION>
Thirteen Weeks Ended Twenty-Six Weeks Ended
---------------------- ------------------------
July 4, June 28, July 4, June 28,
1998 1997 1998 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales $ 5,273 $ 3,182 $ 8,598 $ 12,073
Earnings (loss) before income taxes (1,198) 548 (2,408) 665
Income tax expense (benefit) (479) 219 (963) 266
------- ------- ------- -------
Earnings (loss) from
discontinued operations $ (719) $ 329 $ (1,445) $ 399
======= ======= ======= =======
</TABLE>
-6-
<PAGE>
Note 4 - Extraordinary Losses
The extraordinary losses of $972 ($1,519 pretax) in 1997
were comprised of the debt repurchase premiums and write-off of
unamortized debt issuance costs associated with the repurchases
of $15,598(accreted value) of the 11 1/2% Senior Discount
Debentures and $2,100 of the 10 3/4% Senior Subordinated Notes.
Note 5 - Comprehensive Income
In June of 1997, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 130,
"Reporting Comprehensive Income", which is effective for
financial statements for reporting periods beginning after
December 15, 1997. This statement requires the disclosure of
comprehensive income. The components of comprehensive income for
the Company include net earnings and unrealized gains and losses
relating to the translation of foreign currency balance sheets.
Comprehensive income is shown in the table below for the periods
indicated:
<TABLE>
<CAPTION>
Thirteen Weeks Ended Twenty-Six Weeks Ended
---------------------- ------------------------
July 4, June 28, July 4, June 28,
1998 1997 1998 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net earnings $ 8,298 $ 4,543 $ 11,545 $ 5,688
Other comprehensive income (loss):
Foreign currency translation adjustments 295 306 (169) (1,963)
------- ------- ------- -------
Comprehensive income $ 8,593 $ 4,849 $ 11,376 $ 3,725
======= ======= ======= =======
</TABLE>
The foreign currency translation adjustments do not impact
the Company's income tax expense.
-7-
<PAGE>
Item 2.
- ------
Management's Discussion and Analysis of
Financial Condition and Results of Operations
---------------------------------------------
This section should be read in conjunction with the
Consolidated Financial Statements of Bell & Howell Company and
Subsidiaries (collectively the "Company") and the notes thereto
included in the annual report for the year ended January 3, 1998.
Results of Operations
- ---------------------
First Half 1998 Compared to First Half 1997
- -------------------------------------------
The Company's net sales increased $15.4 million, or 4%, to
$421.5 million in the first half of 1998. The increase resulted
from strong sales growth in the transportation and vehicle
business within the Information Access segment as well as
continued sales growth in the Information Distribution segment.
This was partially offset by a stronger U.S. dollar and, within
Information Access, lower sales of production scanners and the
impact of a strategic shift from a direct retail sales channel to
a more profitable wholesale sales channel in the corporate
portion of the education and library business in the second half
of 1997.
Information Access net sales increased $8.8 million, or 4%,
to $235.6 million in the first half of 1998. Within the
Information Access businesses, the Company provides database
publishing services in select vertical markets including the
transportation and vehicle, and education and library markets,
and also provides imaging solutions and components to financial
institutions, governmental agencies and other paper intensive
industries. Net sales to the transportation and vehicle market
increased $8.3 million, or 16%, to $61.8 million due to increased
sales of electronic parts catalogs and ancillary products to
automotive dealerships, and continued strong sales of dealer
management systems and electronic parts catalogs to powersports
dealerships. In addition to new systems placements, the Company
continued to experience strong sales of additional software
applications and high contract renewal rates related to
previously placed systems. Net sales to the education and
-8-
<PAGE>
library market increased $1.4 million, or 2%, to $91.0 million
due to a growing electronic subscription base, which continued to
reflect strong sales of ProQuest Direct (the Company's
internet-based product offering), and high renewal rates on
existing products. While the sales comparison to the prior year
is adversely impacted as the Company curtailed its direct sales
efforts to the corporate market (and now more profitably serves
corporate libraries through resellers like Dow Jones), sales of
electronic content in the core education and library market
increased 19% over the prior year, as customers increasingly
demand electronic information solutions including on-line
delivery. Net sales of microfilm and paper products to the
education and library market increased modestly versus the
prior year as increased pricing more than offset lower unit
volumes. Imaging Solutions and Components net sales decreased
$.9 million, or 1%, to $82.8 million as increased
electronic/micrographic service revenues were more than offset by
the aforementioned lower sales of production scanners resulting
from a softer overall imaging market and a modified strategy
related to the level of inventory maintained in the distribution
channel.
Information Distribution net sales increased $6.6 million,
or 4%, to $185.9 million in the first half of 1998, as increased
sales of high volume inserting equipment and increased service
revenues were partially offset by the impact of a U.S. Postal
regulatory change which spurred sorting equipment sales in the
first half of 1997. Excluding the impact of the prior year
regulatory change, Information Distribution net sales in 1998
would have increased 7% over the prior year. Service revenues
(which are primarily annuity-based and represent 46% of segment
sales) increased $8.8 million, or 11%, to $86.2 million due to
both an expanded customer base and increased pricing.
The Company's cost of sales increased $3.8 million, or 1%,
to $257.6 million in the first half of 1998, with the gross
profit (net sales less cost of sales) percentage increasing by
1.4 percentage points to 38.9%. The higher gross profit
percentage in 1998 resulted from a more profitable
product/channel mix, improved manufacturing/service productivity,
and increased pricing.
-9-
<PAGE>
Research and development expense of $18.6 million remained
virtually constant with the prior year as the Company continued
to invest in new product offerings. Such investment primarily
related to the development of new electronic products for the
education and library market, new technology platforms for the
transportation and vehicle market, enhanced versions of
production scanners, and new mail processing systems that are
more electronic and software oriented. The Company has
continually positioned itself to take advantage of new
product/technology opportunities (with an increased emphasis on
software solutions) in each of its businesses.
Selling and administrative expense increased $11.6 million,
or 12%, to $111.6 million in the first half of 1998 reflecting
the Company's increased investment in sales and marketing
resources (which reflects an increase in the sales force in the
education and library business to capitalize on the sales growth
opportunities of internet-based products), as well as increased
distribution costs associated with the higher sales volumes.
Operating income increased $.4 million, or 1%, to $33.7
million, while EBITDA (defined as operating income plus
depreciation and amortization) also increased $.4 million, or 1%,
to $60.6 million in the first half of 1998.
Information Access operating income increased $1.1 million,
or 5%, to $25.7 million in the first half of 1998, as the higher
sales volumes (despite the lower sales of production scanners)
and improved gross profit percentage (reflecting a more
profitable product mix with a greater proportion of revenues
related to software and publishing and a lower proportion related
to the sale of hardware), were partially offset by increased
operating expenses, which included severance costs related to
reducing the expense infrastructure. Information Access EBITDA
increased $1.1 million, or 2%, to $48.9 million in the first half
of 1998.
Information Distribution operating income decreased $.1
million, or 1%, to $15.4 million in the first half of 1998, as
the increased sales (despite the impact of the aforementioned
U.S. Postal regulatory change in 1997) and improved gross profit
percentage (also reflecting a more profitable product mix with an
emphasis on software applications and service), were offset by
-10-
<PAGE>
increased operating expenses which included increased research
and development costs for higher technology mail processing
systems/software. Information Distribution EBITDA also decreased
$.1 million, or 1%, to $18.8 million in the first half of 1998.
Excluding the impact of the prior year regulatory change,
Information Distribution operating income and EBITDA in 1998
would have increased by 20% and 16%, respectively, over the prior
year.
Corporate expenses increased $.6 million, or 9%, to $7.4
million in the first half of 1998 as productivity improvements
were more than offset by inflationary/other cost increases.
Net interest expense decreased $10.5 million, or 47%, to
$12.1 million in the first half of 1998, primarily reflecting the
impact of the Company's public offering of 5.0 million shares of
Common Stock in September 1997, the proceeds of which, together
with borrowings under the Company's Credit Agreement, were used
to redeem debt outstanding. Net interest income of Bell & Howell
Financial Services Company, the Company's financing subsidiary,
increased $1.2 million to $5.1 million in the first half of 1998,
primarily due to continued growth in the lease receivables
portfolio.
Income tax expense increased in the first half of 1998 as a
result of a higher level of pretax profit in the current year,
which was partially offset by a reduced income tax rate related
to the favorable settlement of certain prior year tax exposures.
As a result of changing market and competitive dynamics
within global government postal markets, as well as a review of
its future strategic focus, in December 1997 the Company adopted
a plan to divest its postal contracting business. Accordingly,
the operating results of this business have been segregated from
the Company's continuing operations, and are separately reported
as a discontinued operation in the financial statements. Net
sales for this business decreased $3.5 million to $8.6 million in
the first half of 1998, with a net loss of $1.4 million in the
first half of 1998 versus net income of $.4 million in the prior
year.
The extraordinary losses of $1.0 million ($1.5 million
pretax) in the first half of 1997 were comprised of the debt
repurchase premiums and write-off of unamortized debt issuance
-11-
<PAGE>
costs associated with the repurchases of $15.6 million (accreted
value) of the 11 1/2% Senior Discount Debentures and $2.1 million
of the 10 3/4% Senior Subordinated Notes.
Cash provided by continuing operations increased $26.6
million to $28.3 million in the first half of 1998 primarily due
to decreased working capital requirements in the current year.
Cash provided by discontinued operations improved $25.3 million
to $2.1 million in the first half of 1998 primarily due to
reduced investment requirements related to international postal
contracts. As a result of the improved cash flow from
operations, which more than offset continued investments in
capital expenditures/acquisitions, debt (net of cash and cash
equivalents) decreased by $10.5 million to $477.9 million in the
first half of 1998.
Impact of the Year 2000
Over the past few years, the Company has been assessing the
impact on its products and computer systems of Year 2000 related
issues. In response to these assessments, which are ongoing, the
Company has implemented and is in the process of implementing
solutions for those products and systems that have date-related
deficiencies. Based on projects completed to date, and assuming
that remaining issues can be addressed as planned, management
believes that future costs relating to the Year 2000 issue will
not have a material adverse impact upon the consolidated
operations or financial condition of the Company.
Recently Issued Financial Accounting Standards
In June 1997, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 131,
"Disclosures about Segments of an Enterprise and Related
Information." The Company is currently evaluating the impact of
this standard on its financial statements and is required to
adopt this new standard beginning with its fiscal 1998 annual
financial statements. This statement establishes standards for
the way companies are to report information about operating
segments. It also establishes standards for related disclosures
about products and services, geographic areas, and major
customers.
-12-
<PAGE>
In February 1998, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 132,
"Employers' Disclosures about Pensions and Other Postretirement
Benefits." This statement revises employers' disclosures about
pension and other postretirement benefit plans, and will govern
the Company's disclosures related to its benefit plans beginning
with the fiscal 1998 annual financial statements.
In June 1998, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 133,
"Accounting for Derivative Instruments and Hedging Activities".
This statement provides a comprehensive standard for the
recognition and measurement of derivatives and hedging
activities. The Company is currently evaluating the impact of
this standard on its financial statements and is required to
adopt this new standard beginning with its fiscal 2000 financial
statements.
-13-
<PAGE>
Part II. Other Information
- ------- -----------------
Item 1. Legal Proceedings.
- ------ -----------------
The Company is involved in various legal proceedings
incidental to its business. Management believes that the outcome
of such proceedings will not have a material adverse effect upon
the consolidated operations or financial condition of the
Company.
Item 5. Other Information.
- ------ -----------------
Shareholders wishing to bring a proposal before the 1999
Annual Meeting of Shareholders must give written notice of the
proposal to the Secretary of the Company at 5215 Old Orchard
Road, Skokie, Illinois 60077 no later than the close of business
on February 25, 1999.
Item 6. Exhibits and Reports on Form 8-K.
- ------ --------------------------------
(a) Exhibits:
Index Number Description
------------ -----------
(27.1) Financial Data Schedule
(27.2) Restated Financial Data Schedule
Q2-97
(b) Reports on Form 8-K.
No reports on Form 8-K were filed for the thirteen weeks
ended July 4, 1998.
-14-
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
Date: August 11, 1998 BELL & HOWELL COMPANY
/s/ James P. Roemer
-------------------
James P. Roemer
Chairman of the Board
of Directors, President and
Chief Executive Officer
/s/Nils A. Johansson
--------------------
Nils A. Johansson
Executive Vice President,
Chief Financial Officer
and Director
-15-
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE COMPANY'S BALANCE SHEET AND STATEMENT OF OPERATIONS
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-02-1999
<PERIOD-END> JUL-04-1998
<CASH> 6,701
<SECURITIES> 0
<RECEIVABLES> 191,950
<ALLOWANCES> 6,782
<INVENTORY> 112,160
<CURRENT-ASSETS> 318,550
<PP&E> 407,057
<DEPRECIATION> 261,714
<TOTAL-ASSETS> 777,450
<CURRENT-LIABILITIES> 292,467
<BONDS> 480,183
0
0
<COMMON> 23
<OTHER-SE> (52,264)
<TOTAL-LIABILITY-AND-EQUITY> 777,450
<SALES> 421,497
<TOTAL-REVENUES> 421,497
<CGS> 257,567
<TOTAL-COSTS> 387,767
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 12,080
<INCOME-PRETAX> 21,650
<INCOME-TAX> 8,660
<INCOME-CONTINUING> 12,990
<DISCONTINUED> (1,445)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,545
<EPS-PRIMARY> 0.49
<EPS-DILUTED> 0.49
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS RESTATED FINANCIAL DATA SCHEDULE CONTAINS SUMMARY
FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S BALANCE
SHEET AND STATEMENT OF OPERATIONS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-03-1998
<PERIOD-END> JUN-28-1997<F1>
<CASH> 14,183
<SECURITIES> 0
<RECEIVABLES> 162,050
<ALLOWANCES> 5,391
<INVENTORY> 105,952
<CURRENT-ASSETS> 290,181
<PP&E> 374,059
<DEPRECIATION> 226,175
<TOTAL-ASSETS> 767,996
<CURRENT-LIABILITIES> 262,901
<BONDS> 605,185
0
0
<COMMON> 18
<OTHER-SE> (162,403)
<TOTAL-LIABILITY-AND-EQUITY> 767,996
<SALES> 406,095
<TOTAL-REVENUES> 406,095
<CGS> 253,782
<TOTAL-COSTS> 372,781
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 22,594
<INCOME-PRETAX> 10,720
<INCOME-TAX> 4,459
<INCOME-CONTINUING> 6,261
<DISCONTINUED> 399
<EXTRAORDINARY> (972)
<CHANGES> 0
<NET-INCOME> 5,688
<EPS-PRIMARY> 0.31
<EPS-DILUTED> 0.31
<FN>
<F1>RESTATEMENT REFLECTED HEREIN IS THE RESULT OF
RECLASSIFICATIONS TO PRIOR PERIODS' FINANCIAL STATEMENTS TO
CONFORM TO THE CURRENT PERIOD PRESENTATION.
</FN>
</TABLE>
